POWERSOUTH ENERGY COOPERATIVE

About POWERSOUTH ENERGY COOPERATIVE

Several hundred thousand Alabamans and Floridians get their electric power courtesy of the work of PowerSouth Energy Cooperative, which provides wholesale power to its member-owners (16 electric cooperatives and four municipal distribution utilities). Its distribution members provide electric services to almost 417,200 customer meters in central and southern Alabama and western Florida. PowerSouth operates a more than 2,200-mile power transmission system and has more than 2,000 MW of generating capacity from interests in six fossil-fueled and hydroelectric power plants.

The company owns and operates six generation facilities and holds ownership interest in an additional facility. Its diverse generating fuel mix includes natural gas, coal, and water (hydro). It also has compressed air energy storage technology, and a disciplined fuel supply hedging program that minimizes the impact of fuel cost increases. In addition, PowerSouth maintains long-term purchased power agreements to ensure economic and reliable power supply for its members.

PowerSouth serves the wholesale energy needs of electric cooperatives and municipal electric systems in Alabama and northwest Florida, who in turn serve more than a million consumers. PowerSouth is dedicated to providing reliable energy at the lowest possible cost to its members.

Financial Performance

The company’s revenues increased by 3% in 2013 primarily due to an increase in member revenues as a result of an increase in energy sales. The remaining increase was due to the surcharges added to the excess demand rate during 2013.

That year PowerSouth’s net income decreased by 6% as the result of increased operating costs caused by higher distribution costs and administration and general expenses.

Its operating cash inflow increased to $63.5 million in 2013 (compared to $38.3 million in 2012) due to a rise in account receivables and inventories.

Strategy

To meet future demand and tightening environmental regulations, the company is looking to diversify and expand its power production assets, with an emphasis on cleaner energy plants. PowerSouth's long-term energy plans include a 20-year contract for 125 MW of nuclear power from two Vogtle Units being built by the Municipal Energy Authority of Georgia, near Augusta, and due to come onstream in 2016 and 2017. The company is also investing in wind power and biomass-to-energy initiatives.

Company Background

PowersSouth is owned and managed by it 20 distribution members.

The company once provided propane, but sold its Cooperative Propane unit in 2011 to focus on its core power businesses.

In 2008 Alabama Electric Cooperative changed its name to PowerSouth Energy Cooperative to better reflect its service territory (Alabama and Florida) and its opportunities for future growth.

Founded in 1941 as Alabama Electric Cooperative, the coop promotes a strong economic development program aimed at bringing industry into both Alabama and Florida.